Best Buy: A Solid Buy As The Recovery Continues
Helix Investment Research
Helix Investment Research
Best Buy Continues To Show Progress
Best Buy's Dip Is A Great Opportunity
Saj Karsan • 72 Comments
Saj Karsan • 72 Comments
Thu, Jan. 14, 7:12 AM
- Best Buy (NYSE:BBY) reports comparable-store sales fell 1.2% during the holiday season.
- Total revenue in the domestic segment was down 0.8% to $10.05B as a weak performance in the mobile phone category impacted results. Categories with strength included wearable technology, home theater, and appliances.
- Online comparable-store sales rose 12.6% during the two-month period.
- Best Buy expects a 1.5% Y/Y decline in domestic revenue during Q4. International revenue is seen falling 30%.
- BBY -4.37% premarket to $28.00.
Sat, Jan. 9, 10:47 AM
- The success of the retail sector during the holiday season came into focus after a number of chains issued their holiday sales reports last week and research firms weighed in with data-driven analysis.
- Lesson #1 - Early and late: 25% of all shoppers purchased a Christmas present before Halloween, while the Black Friday to Cyber Monday period disappointed. A late flurry of shopping was a boon for many large retail chains, as well as Amazon (NASDAQ:AMZN), FedEx (NYSE:FDX), and UPS (NYSE:UPS). Trading around anecdotal reports of Black Friday traffic now looks like an exercise in futility.
- Lesson #2 - Women over men: Sales of women's apparel were strong during the two-month period, up 10%, while demand for men's apparel tailed off significantly. A microcosm of the trend is the +8% comp reported by L Brands (NYSE:LB) - while The Men's Wearhouse (NYSE:MW) is in a -72% 3-month funk. The disastrous performance in the electronics category (BBY, CONN, HGG) reinforces the trend.
- Lesson #3 - The sweet spot of retail was in the middle: Luxury sellers (COH, KORS, RL, TIF) had a weak holiday season as F/X challenges and lackluster Asian tourism factored in, while discounters also were scrambling due to a high level of promotional activity. The $2-gas benefit seemed to help in the middle where Costco (NASDAQ:COST), Target (NYSE:TGT), Ross Stores (NASDAQ:ROST), TJX Companies (NYSE:TJX), and The Children's Place (NASDAQ:PLCE) set up shop.
- Lesson #4 - No slowdown in online : Holiday online sales rose 20% Y/Y. Brands such as Ulta Salon (NASDAQ:ULTA) and Victoria's Secret that sell easily through e-commerce channels are well-positioned to benefit from the trend, although for a large part of the apparel sector the e-commerce mix is a margin cruncher. Just ask Gap (NYSE:GPS), Urban Outfitters (NASDAQ:URBN), and American Eagle Outfitters (NYSE:AEO).
- Sources: Planalytics.com, Chain Store Age, company holiday sales reports
Fri, Jan. 8, 10:14 AM
- Shares of Best Buy (BBY -4.6%) are under pressure after Cleveland Research warns on sales trends. Also factoring in, the electronics category was weak at several other retail chains during the holiday season.
- The company is due to report on holiday sales next week which is likely to add even more volatility.
- Best Buy is down 23% over the last three months.
Dec. 29, 2015, 9:28 AM
- Argus gives Best Buy (NYSE:BBY) a shot in the arm by reiterating its Buy rating on the retailer after the holiday shopping season.
- A very positive read on holiday spending from MasterCard yesterday has raised hopes that some sales forecasts of big box retailers will be topped.
- Best Buy is slated to release holiday sales figures in mid-January.
- Previously: Late rush may have turned holiday season around (Dec. 28 2015)
Dec. 28, 2015, 10:31 AM
- MasterCard reports holiday sales rose 7.9% during the holiday season, led by strong growth for big ticket items. The growth rate is much stronger than the 3.7% gain in holiday sales forecast by the National Retail Federation.
- Online sales were up 20% Y/Y during the period which implies some acceleration in December after some Black Friday and Cyber Monday reports disappointed.
- The strong read from MasterCard on top of the volume spike at FedEx adds some weight to the theory that the 2015 holiday shopping season was back-half loaded due in part to a higher reliance on online orders. Warm weather also played a factor by pushing back some apparel buying.
- Wal-Mart (NYSE:WMT), Target (NYSE:TGT), Macy's (NYSE:M), and Best Buy (NYSE:BBY) are seen as potential beneficiaries of the late rush, while Amazon may have captured even more market share.
- Related ETFs: XLP, XLY, VDC, XRT, VCR, RTH, RETL, FXG, PBJ, IYK, IYC, FXD, PEJ, FDIS, RHS, FSTA, SCC, UCC, RCD, PMR, PEZ, UGE, PSL, PSCC, PSCD, SZK, BITE
Dec. 18, 2015, 11:23 AM
- Black Friday results may have slightly stronger than what was first indicated in largely anecdotal reports last month, observes NPD Group.
- The research firm says the percentage of shoppers hitting stores on the key shopping day increased slightly year-over-year to 43%. Thanksgiving traffic was also up, although the percentage of shoppers that went out both days actually fell.
- Best Buy (NYSE:BBY) and Wal-Mart (NYSE:WMT) were volume winners during different periods of Thanksgiving Day, while Macy's (NYSE:M) was the peak leader on Black Friday.
- Target (NYSE:TGT) and Amazon are seen by NPD as big holiday shopper winners when the broader period is reviewed. Target is hitting its stride largely due to solid assortment and inventory management, while the popularity of Amazon Prime has helped the e-commerce beast to gain market share.
- Discretionary retail ETFs: XLY, XRT, VCR, RTH, RETL, FXD, FDIS, RCD, PMR, PEZ, PSCD, BITE.
Dec. 11, 2015, 9:05 AM
- Retail sales were up 1.4% Y/Y in November as most categories stayed in positive territory to help offset the sharp 20% drop in gasoline station revenue. The 0.5% M/M increase in the core rate was the best growth since July and is seen as important given some of the overwrought headlines about weak Black Friday traffic.
- Consumers did increase their spending on food during November. Sales in the food and beverage stores category was up 0.7% M/M and 2.1% Y/Y, while the food services category was 0.7% higher M/M and 6.5% Y/Y.
- Department stores ([[KSS], M, JWN, DDS, JCP) lagged overall retail stores once again. Sales for the group were flat in November from October and were down 2.4% from last year's level.
- Analyst think the consumer spending read for November could be just strong enough to give some support to Big Retail (WMT, TGT, SPLS, BBY, COST) stocks.
- Retail Sales report (.pdf)
Dec. 2, 2015, 7:39 PM
- Retail sales (ex-auto and gas) rose 4.6% in November, according to data from MasterCard.
- Black Friday sales were lower than a year ago, while sales for the full Thanksgiving week rose a modest 0.3%. The lower growth rate for the holiday period than the full month adds some support to the theory of some analysts that many typical Black Friday sales were pulled forward.
- MasterCard reports online sales rose 13% for the four-day weekend period just in front of Cyber Monday. For the month, e-commerce sales were up 16%.
- The strong mix of e-commerce this holiday season makes it crucial for Wal-Mart (NYSE:WMT), Target (NYSE:TGT), Staples (NASDAQ:SPLS), and Best Buy (NYSE:BBY) that they keep pace with Amazon's e-commerce share still strong.
- Related ETFs: XLY, XRT, VCR, RTH, RETL, IYK, FXD, FDIS, RCD, PMR, UGE, SZK, BITE
Nov. 30, 2015, 12:55 PM
- It's not a happy Cyber Monday for most retail chain stock on broad concerns over soft store traffic and weak pricing.
- Notable decliners include Guess (GES -5.5%), Express (EXPR -4.6%), Zumiez (ZUMZ -7%), Foot Locker (FL -1.7%), Finish Line (FINL -2.1%), Urban Outfitters (URBN -4.4%), Francesca's (FRAN -2.9%), DSW (DSW -2.7%), and Men's Wearhouse (MW -3.3%).
- Discounters are down sharply, led by Big Lots (BIG -5.4%), Gordmans Stores (GMAN -6%), and Five Below (FIVE -4.3%).
- Big box retailers Wal-Mart (WMT -1.3%), Costco (COST -1.4%), and Target (TGT -1.4%) are lower with concerns over website capabilities lingering in the background. Best Buy (BBY +1.1%) is a bit of a surprise with a 1.4% gain after reports indicate demand for Apple products is exceptionally strong.
- Specialty retailers such as The Container Store (TCS +1.6%), Party City (PRTY +1.2%), and The Michaels Companies (MIK +1.4%) are also retail outliers as consumers are seen spending a higher percentage of their disposable income close to their homes.
- Previously: Retail stocks on watch after Amazon scoops up more Black Friday sales (Nov. 30 2015)
- Previously: Department stores stocks weak on holiday sales anxiety (Nov. 30 2015)
Nov. 27, 2015, 8:01 AM
- Target (NYSE:TGT) reports a "successful" start to its Black Friday weekend, including "unprecedented" results on its website and a strong turnout in stores on Thanksgiving Day.
- TGT says top selling Black Friday items so far include Apple iPads, gaming consoles including Nintendo Wii U, TVs, Beats Solo 2 headphones... and stuffed teddy bears.
- TheStreet.com reports findings generally consistent with TGT's commentary, based on 10 visits to Target stores on Long Island yesterday, but that crowd sizes at TGT's openings were not quite as large as those seen at competitors J.C. Penney (NYSE:JCP) and Best Buy (NYSE:BBY).
Nov. 20, 2015, 8:08 AM
- Best Buy (NYSE:BBY) declares $0.23/share quarterly dividend, in line with previous.
- Forward yield 3.0%
- Payable Dec. 31; for shareholders of record Dec. 10; ex-div Dec. 8.
Nov. 19, 2015, 9:14 AM
Nov. 19, 2015, 7:19 AM
- Comparable-store sales rose 0.8% for Best Buy (NYSE:BBY) in FQ3. Analysts expected a mark closer to 1.5%.
- International sales were down 29.9% to $729M. International gross profit rate -10 bps to 22.5%.
- Domestic segment revenue +1.2% to $8.09B. Domestic comparable-store sales were up 0.8%. Online comparable sales +21% to account for 8.8% of all sales.
- Domestic gross profit rate +110 bps to 24.1%. A higher mix of large screen TVs was a factor.
- Consolidated gross profit rate +90 bps 23.9%. Consolidated operating income +30 bps to 2.6%.
- Guidance: Best Buy expects flat domestic revenue growth in Q4 and a 30% drop in international sales.
- Previously: Best Buy beats by $0.06, misses on revenue (Nov. 19 2015)
- BBY -8.2% premarket to $28.75.
Nov. 19, 2015, 7:02 AM
- Best Buy (NYSE:BBY): Q3 EPS of $0.41 beats by $0.06.
- Revenue of $8.82B (-2.3% Y/Y) misses by $40M.
Nov. 18, 2015, 5:30 PM
Nov. 16, 2015, 8:20 AM
- Best Buy (NYSE:BBY) is downgraded by RBC Capital Markets to Sector Perform from Outperform.
- The investment firm cited concerns on the electronics categories after seeing other big box retailers report soft sales in the category.
- Best Buy reports Q3 numbers on November 19. Analysts expect revenue of $8.881B and EPS of $0.35.
- Best Buy closed at $32.06 on Friday vs. a 52-week trading range of $28.32 to $42.00.
Best Buy Co., Inc. is a multinational retailer, which provides consumer electronics, home office products, entertainment products, appliances and related services. The company operates through two business segments: Domestic and International. The Domestic segment is comprised of the operations... More
Industry: Electronics Stores
Country: United States
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